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Can I negotiate my mortgage rate and how do I get the best rate?

“Always pick your yard based on your Summer lifetstyle.”


September 20, 2018 - Karl Yeh

Wondering how to get the best mortgage rate? How do you negotiate the rate with a bank or lender? In this episode, we discuss if you can negotiate mortgage rates with a bank or lender and potential negotiating tips. We also explore if your ability to qualify for a mortgage impacts your rates and if the recent interest rate increases affects how you would negotiate. 



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Karl Yeh:

Hi, everyone. Welcome to another Homebuyer's School video, a channel where you get the latest strategies, tactics and tips from home buying experts. And remember, if this is your first time on this channel and you want to get the latest strategies from the experts, hit the subscription button below. Hit the little notification bell so you don't miss anything.

Karl Yeh:                          

Today I'm joined by Mujtaba Syed, Manager Mobile Mortgage Specialist for TD Canada Trust, and today the question we're going to answer is [00:00:30]:

Can you actually negotiate your mortgage rate?

So Mo, when you're going into your lender or the bank, could you actually say hey...can you actually negotiate that rate that they're going to give you?

Mujtaba Syed:                 Yeah. Great question, Karl.

Yes and no.

Technically what comes into it, every bank they technically have a rate grid, which is what they base on their rates on. They look at to see what's currently available and what's the lowest that they're willing to go.

When you go in and when [00:01:00] you want to talk to a lender about your rates, definitely shop around to see what the banks are offering.

Most banks are going to be just one-tenths between each other, or if there's a big discount happening from one lender, it's definitely beneficial for you to shop around the competitors, and then speak to a lender about that and say: "Listen, I know that you guys are offering certain rates, but I know your competitor is offering a much lower rate. What can we do about that?"

In most instances and scenarios, your bank should be able to match that rate. [00:01:30] It really just depends on their grid.

Definitely have that conversation with them and definitely shop around, and it's definitely a beneficial thing for you to do, is try to shop around and get the best rates and take it to your lender and give them the opportunity to match or sometimes even beat that rate.

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Additional tips for negotiating your mortgage rates

Karl Yeh:                          

Is there any other way besides shopping around, comparing rates between different banks? Is there any other way to negotiate that?

Mujtaba Syed:                

Yeah, absolutely. It just depends on your relationship with your lender and your specialist.

Have an open honest discussion with them and say, "Listen, [00:02:00] I don't want to shop around. I really enjoy working with you. We have a relationship here. What's the best absolute rate that you can do for me?"

In that scenario, let the lender get back to you and explain to you that this is the absolute best that he can do, and if that's a rate that you're comfortable and you're happy with, then you know they've done their job.

But if you feel like, hey, it still doesn't seem right to you and you feel like there's still a more of a wiggle room, definitely have the conversation with them and speak to them about it. It never hurts to ask.

Karl Yeh [00:02:30]:                          

Does your  ability to qualify for a home, impact your ability to negotiate that mortgage rate?

Mujtaba Syed:                

Not really, Karl.

When it comes down to mortgage rates, we don't really ... there's a big misconception out there in the market, let's use that, if you have a better credit, you might get better rates.

Technically, credit and other scenarios definitely help you qualify, but once you're qualified, almost everyone is subject to the exact same rates or have access to the exact same rates.

[00:03:00] That's a great way for us not to penalize someone who's made some mistakes in their life, et cetera.

But everyone has access to get great rates once you're qualified.

Have the discussion with your lender. Have that open honest conversation with them to see. I obviously want the best rate. What is it that you're willing to offer me, and see what we can do to make that happen, and then go from there.

Karl Yeh:                           All right, and then the last question is:

How do you get the best mortgage rate from your bank?

Mujtaba Syed:                

In my [00:03:30] opinion, the best way to do it is actually know your surroundings. Kind of go, do shop around, check rates.

Be an what we call informed consumer. Be an educated consumer and see what's available out there.

When you go into your meeting, you have enough knowledge to know what is being offered to you, and then you can have the discussion with them. It's really hard to have a discussion without really knowing what's available in the market.

You could be thinking of a rate in your head that was from five, six months ago which is not available today. Go in, have the discussion with [00:04:00] them, and definitely shop around.

Karl Yeh:                          

Has the recent interest rate increases, has that impact your ability to negotiate?

Mujtaba Syed:                

Yes and no. Another great question. When rates do go up, banks have little leeway to see if ... they can usually go backwards in time to see what's available, and maybe their discounts are not that great. It's also based on just timing alone.

Once again, shop around and have that discussion. It's more than just try to get the lowest rate possible, [00:04:30] but always to see what is also attached to that rate.

You might find a really low rate on the internet, but when you look into what's tied into that term or the agreement to get that rate, it might not be beneficial for you.

They might have less prepayment privileges. They might have some exiting scenarios that are not comfortable for yourself or something.   


Always when you're comparing, compare apples to apples. Don't really compare rates just because it's a number.

See who's offering that number, what are the [00:05:00] benefits, the terms that are attached to that lender and their mortgage compared to your lender and your mortgage, and then decide for yourself what's best.

Sometimes it makes sense to pay a slightly higher rate to get the comfort and security of a bigger bank, to get that maybe higher prepayment privileges if you want to pay it off sooner, or if you feel like it's easier for me to exit or renew my mortgage or refinance my mortgage.

You want to look at all those options. There's a lot to consider, not just a rate at the end of the day.

Karl Yeh:                           Perfect. [00:05:30] And my question for you is:

Did you negotiate your last mortgage rate and if have any additional tips, let us know in the comment section below.

Do you have anything else to add, Mo?

Mujtaba Syed:                 No, I think that's great.

Karl Yeh:                          

Perfect. And remember, for all our videos on mortgages, mortgage rates, mortgage approval, see it in the description below. Thank you very much for joining us, and we'll catch you next time.


Your turn:

Let us know if you have additional mortgage or financing related questions that we can answer by submitting them in the comments section below. 

Homebuyer's School publishes new content weekly so subscribe or check back regularly for the latest information, strategies and tips from home buying experts.  

About Mujtaba Syed:

Mujtaba is an experienced mobile mortgage specialist with a demonstrated history of working in the banking industry. Skilled in Negotiation, Commercial Lending, Banking, Sales, and Credit Analysis. Strong product management professional.

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